DHL Global Connectedness Index 2020 Signals Recovery From COVID Setback

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The DHL Global Connectedness Index 2020 (GCI) released a few months ago has noted that trade and capital flows have already started to recover as international data flows surged during the spreading pandemic as in-person contact went in to the online world, boosting international internet traffic, phone calls and e-commerce.

Global Assessment During Pandemic

The report, now in its seventh edition, is the first comprehensive assessment of globalisation during the spreading COVID-19 pandemic. It tracks international flows of trade, capital, information and people across 169 countries and territories.

After holding steady in 2019, current forecasts imply that  the index will fall significantly in 2020 due to the distancing effects of COVID-19 on societies, such as closed borders, travel bans and grounded passenger airlines. Nonetheless the pandemic is unlikely to send the world’s overall level of connectedness below where it stood during the 2008–09 global financial crisis.

“The current crisis has shown how indispensable international connections are for maintaining the global economy, securing people’s livelihoods and helping companies strengthen their trading levels,” said John Pearson, CEO of DHL Express.

“Connected supply chains and logistics networks play an essential role in keeping the world running and stabilising globalisation especially at a time of a crisis that spans our globe. This reminds us of the need to stay prepared for any challenge. The recent vaccine breakthrough has put a spotlight on the systemic importance of fast and secure medical logistics dependent on a worldwide interconnected network that effectively ensures international distribution,” he said speaking about the report.

While COVID-19 has disrupted business and life around the world, it has not severed the fundamental links that connect nations. “This report shows that globalization did not collapse in 2020, but that the pandemic did transform – at least temporarily – how countries connect. It also demonstrates both the dangers of a world where critical linkages break down and the urgent need for more effective cooperation in the face of global challenges,” GCI lead author Steven A. Altman, Senior Research Scholar and Director of the DHL Initiative on Globalisation at the NYU Stern School of Business commented.

Mr. Altman added that stronger global connectedness could accelerate the world’s recovery from the COVID-19 pandemic, as countries that connect more to international flows tend to enjoy faster economic growth.

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A file photo of two passengers taking a selfie at the Chhatrapati Shivaji Maharaj International Airport’s Jaya He Museum Carnival in 2018. Source: CSMIA/Twitter

The COVID-19 stress test for Globalisation

The report said that predictably, lockdowns and travel bans to curb the spread of the virus had led to an unprecedented collapse of people flows in 2020. The number of people traveling to foreign countries is on track to fall 70% in 2020, it said pointing to the latest UN forecast.

International tourism may not return to its pre-pandemic level until 2023. In contrast, trade, capital, and information flows have held up surprisingly well. International trade has rebounded strongly after a sharp plunge at the onset of the pandemic and remains a vital backbone for economies worldwide.



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